Guarantees can be issued on short term loans, revolving and contract lines of credit, and term loans for asset purchases, purchases of existing business, or for establishing a new business. California Southern can guarantee up to 90% of a loan with a maximum dollar exposure of $500,000 and a maximum term of seven years. There is no minimum loan level. The fees include 2% of the portion of the loan that is guaranteed and a $250 documentation fee.
The time involved in securing a guarantee depends upon a number of factors. First, there must be a bank willing to fund the loan subject to receiving the guarantee. All required financial information and supporting documents must be provided to California Southern together with the request from the bank for the guarantee.
California Southern's staff must approve the request and make presentations to its Loan Committee and Board of Directors. The total process may take from 2 to 4 weeks. The borrower generally has the greatest influence on timing since both the bank and California Southern are dependent upon the borrower for the submission of all information necessary to evaluate the request. There are, however, no special forms or time consuming applications required by the State Loan Guarantee Program. If the request receives approval of the staff of California Southern, its Loan Commitee, and ultimately the Board of Directors, the guarantee is issued.
